Correlation Between SCB X and Newcity Public
Can any of the company-specific risk be diversified away by investing in both SCB X and Newcity Public at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SCB X and Newcity Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCB X Public and Newcity Public, you can compare the effects of market volatilities on SCB X and Newcity Public and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SCB X with a short position of Newcity Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Newcity Public.
Diversification Opportunities for SCB X and Newcity Public
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCB and Newcity is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcity Public and SCB X is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SCB X Public are associated (or correlated) with Newcity Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcity Public has no effect on the direction of SCB X i.e., SCB X and Newcity Public go up and down completely randomly.
Pair Corralation between SCB X and Newcity Public
Assuming the 90 days trading horizon SCB X is expected to generate 4.58 times less return on investment than Newcity Public. But when comparing it to its historical volatility, SCB X Public is 6.3 times less risky than Newcity Public. It trades about 0.07 of its potential returns per unit of risk. Newcity Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 141.00 in Newcity Public on November 19, 2024 and sell it today you would earn a total of 97.00 from holding Newcity Public or generate 68.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
SCB X Public vs. Newcity Public
Performance |
| Timeline |
| SCB X Public |
| Newcity Public |
SCB X and Newcity Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCB X and Newcity Public
The main advantage of trading using opposite SCB X and Newcity Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, Newcity Public can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Newcity Public will offset losses from the drop in Newcity Public's long position.| SCB X vs. Tata Steel Public | SCB X vs. SAF Special Steel | SCB X vs. MCS Steel Public | SCB X vs. Earth Tech Environment |
| Newcity Public vs. Ocean Glass Public | Newcity Public vs. OCC Public | Newcity Public vs. Wattana Karnpaet Public | Newcity Public vs. Peoples Garment Public |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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